Lufthansa passengers face huge disruption to travel plans on Monday after the German airline cancelled almost all its flights in Europe because of a staff strike.

Only 20 out of 1,650 planned short-haul flights would operate, Lufthansa said, while long-haul operations also faced "massive flight cancellations and delays" with just 12 out of 70 flights operating from Frankfurt, Munich and Düsseldorf.

The virtual elimination of Lufthansa's daily schedule is one of the biggest effects yet of a dispute with the Verdi trade union, which called the strike on Friday after the airline rejected its pay increase demands. Verdi represents 33,000 of Lufthansa's ground staff and cabin crew.

Stefan Lauer, Lufthansa's chief negotiator with the union, said the strike stemmed from competition between various trade unions, which he said "were inflicting massive damage at ever-shorter intervals on the air transport industry and thus also on Lufthansa".

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"In terms of its effect, a 24-hour warning strike is de facto an all-out strike, and given the initial progress made at the negotiating table, it is a completely excessive measure that can in no way be justified ... It is high time that policy makers address the need for new rules with regard to industrial conflict in those areas which are essential for the industry infrastructure," he said.

But Verdi said the strike was being called because Lufthansa's pay offer to staff remained "miles removed" from its demands for a 5.2 per cent annual increase. A strike last month led to the cancellation of some 500 flights.

The strikes come as Lufthansa, Europe's biggest airline by annual revenues, undertakes a cost-cutting programme that Verdi said showed a "scary future" for staff.

The airline is merging many short-haul fights with its lower-cost Germanwings subsidiary. Germanwings' operations would not be affected by Monday's strike, said Lufthansa, adding that some domestic passengers could use their tickets on German rail services during the strike.